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madreJ [45]
3 years ago
14

An asset used in a four-year project falls in the five-year MACRS class for tax purposes The asset has an acquisition cost of $5

,100,000 and will be sold for $1,600,000 at the end of the project. If the tax rate is 21 percent, what is the aftertax salvage value of the asset? Refer to Table 10.7 (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
Business
1 answer:
zalisa [80]3 years ago
4 0

Answer:

$1,449,068.80

Explanation:

Book value on purchase                    $5,100,000

Less: Accumulated depreciation       $4,218,720

(5,100,000*(0.2+0.32+0.192+0.1152) <u>                     </u>

Book value on sales                            <u>$881,280</u>

<u />

Salvage value of paint   $1,600,000

Book value of as set      <u>$881,280   </u>

Gain on disposal            <u>$718,720</u>

Tax on gain on disposal = $718,720 * 21% = $150,931.20

After tax cash flow = $1,600,000 - $150,931.20

After tax cash flow = $1,449,068.80

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Crazy boy [7]

Answer:

The court concluded truthfully, as he had done all the analysis and acknowledged the documentation and investment purposes.

The program scammed funds which might have been used for small-income housing by the government agency.

<em>United States v. McGuire, 744 F.2d 1197 (Cir. 11, 1984).</em>

6 0
3 years ago
Kane Manufacturing has a division that produces two models of fireplace grates, x units of model A and y units of model B. To pr
Mademuasel [1]

Answer:

The company will produce the requested 150 units of A for a gain of 300 dollars

and then use his resourses to produce B yielding a gain of 90 dollars

total of 390 profit

Explanation:

The company will produce at least 150 units of product A therefore:

lbs used: 150 x 3 = 450

minutes of labor used 150 x 8 = 1,200

leaving available:

1,200 - 450 = 750 lbs

1,500 - 1,200 = 300 mins

As time is the most scarce resource we allocate base on thecontribution per minute:

product A $2 of profit for 8 minutes: 0.25 dollars per minute

product B $1.5 of profit for 5 minutes: 0.30 dollars per minute

As product B is more profitable considering labor time we use the entire amount left to produce product B

300 min / 5 minutes = 60 units of b

6 0
3 years ago
Esme Inc., a manufacturer of cosmetics, ran an ad campaign in which it claimed that Esme's "Vivid" range of water-proof mascara
Pie

Answer:

The answer is D. Puffery.

Explanation: When an advertisement is being made, certain boastful and exaggerated claims can be made by a company about the superiority and uniqueness of their product.

This claim is termed as Puffery.

Puffery is defined as advertising or promotional content that makes exaggerated or boastful statements about a product or service that are based on opinion rather than something that can be measured.

Puffery in advertising is done based on the chance that no reasonable person would presume the exaggeration to be literally true.

This is what Esme Inc. has done by claiming that its mascara is the best in the world, and also gives ten times more volume to the eyelashes. This is an exaggerated claim.

6 0
2 years ago
Read 2 more answers
Alpha Communications, Inc., which produces telecommunications equipment in the United States, has a very strong local market for
CaHeK987 [17]

Answer:

1-If the transfer price is set equal to the U.S. variable manufacturing cost, Alpha Communications will have a profit of $32.80 per circuit board with US Share as $0 and German Share as $32.80.

2-If the transfer price is set equal to the U.S. market price, Alpha Communications will have a profit of $39.20 per circuit board with US Share as $24 and German Share as $15.20. The transfer price as US market price is more effective for the Alpha Communications.

3:a- If the German division can obtain the boards in Germany for 155, it is better for the German division because due to lack of additional shipping fee and import duty, this price is more feasible for the German division.

3:b- If the company decide to sell the US circuit boards locally and allow German division to obtain the circuit boards in Germany, then Alpha Communication will have a profit of $60 per circuit board with US Share as $24 and German Share as $36.

Explanation:

1-If the transfer price is set equal to the U.S. variable manufacturing cost, Alpha Communications will have a profit of $32.80 per circuit board. The calculations are as follows:

US Operation:

Sales Revenue(Price set to variable manufacturing cost): $130

Variable Manufacturing Cost:                                              : ($130)

_________________________________________________

Contribution Margin                                                            : $ 0

German Operation:

Selling Price:                                                                         $360

Transfer Price:                                                                      ($130)

Additional Cost:                                                                    ($115)

Shippng Cost:                                                                       ($20)

Import Duty (10% of Transfer Price): 10% x 130=0.1x130=    ($13)

_________________________________________________

Income Before Tax:                                                             $82

Income Tax (60% of Income Before Tax):60%x82           ($49.20)

___________________________________________________

Income After Tax                                                                 $32.80

2-If the transfer price is set equal to the U.S. market price, Alpha Communications will have a profit of $39.20 per circuit board. The transfer price as US market price is more effective for the Alpha Communications. The calculations are as follows:

US Operation:

Sales Revenue(Price set to variable manufacturing cost): $170

Variable Manufacturing Cost:                                              : ($130)

_________________________________________________

Income Before Tax                                                                : $ 40

Income Tax (40% of Income Before Tax):40%x40              :($16)

_________________________________________________

Income After Tax:                                                                   : $24

German Operation:

Selling Price:                                                                         $360

Transfer Fee:                                                                        ($170)

Additional Cost:                                                                    ($115)

Shippng Cost:                                                                       ($20)

Import Duty (10% of Transfer Price): 10% x 170=0.1x170=    ($17)

_________________________________________________

Income Before Tax:                                                             $38

Income Tax (60% of Income Before Tax):60%x38           ($22.80)

___________________________________________________

Income After Tax                                                                 $15.20

Total Income By Alpha Communication: $24+$15.20=$39.20

3-a: If the German division can obtain the boards in Germany for 155, it is better for the German division because due to lack of additional shipping fee and import duty, this price is more feasible for the German division.

At the lower tranfer price of 130, the total impact of transfer is given by

Transfer Price:                                                                       $130

Shippng Cost:                                                                        $20

Import Duty (10% of Transfer Price): 10% x 130=0.1x130=    $13

___________________________________________________

Total Impact                                                                          $163

It is more than the local available price, Thus the company should purchase their circuit board locally.

3-b If the company decide to sell the US circuit boards locally and allow German division to obtain the circuit boards in Germany, then Alpha Communication will have a profit of $60 per circuit board.

US Operation:

Sales Revenue(Price set to variable manufacturing cost): $170

Variable Manufacturing Cost:                                              : ($130)

_________________________________________________

Income Before Tax                                                                : $ 40

Income Tax (40% of Income Before Tax):40%x40              :($16)

_________________________________________________

Income After Tax:                                                                   : $24

German Operation:

Selling Price:                                                                         $360

Local Circuit Board Price                                                     ($155)

Additional Cost:                                                                    ($115)

_________________________________________________

Income Before Tax:                                                             $90

Income Tax (60% of Income Before Tax):60%x38           ($54)

___________________________________________________

Income After Tax                                                                 $36

Total Income By Alpha Communication: $24+$36=$60.0

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